Many consumers use credit cards as a way to secure money for a wide variety of things, from home improvements to cars. Given the low interest rates and attractive terms offered by many credit card companies, particularly for individuals with prime credit, it is no wonder that many people turn to credit cards instead of personal loans.
However, is credit card debt really the same as a personal loan? For many individuals, attractive balance transfer offers lure them into using a credit card, while many personal loans carry a much higher interest rate than many credit cards.
However, with the good comes the not-so-good – and that goes for credit cards, too.
There are a number of reasons why credit cards are much different than personal loans:
According to a recent AP article, more shoppers are wary of using credit cards this year despite the passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009.
Shoppers were so loath to use credit this holiday season that they were paying with cash, debit card and even cashing in frequent flyer miles and using free financing. They attribute this change in shopping behavior to a desire on the part of recession weary Americans to stick to a budget, and avoid rising interest rates.
That’s certainly a good thing.
What’s not a good thing is an increase in the use of layaway. That’s evidence that shoppers are still buying things they can’t afford to, and are living beyond their means. Maybe t